This essay addresses the role of transaction cost economics (TCE) inadvancing the resource-based view. In particular, it is argued that TCE hasthe potential to remedy a number of weak spots in the RBV, such as theabsence of attention in the RBV to the interaction between value creation andvalue appropriation. This and other weak spots in the RBV stem from nottaking account of transaction costs to a sufficient extent. Integrating TCEwith the RBV adds new insight into the analysis of sustained competitiveadvantage.KeywordsThe resource-based view, transaction cost economics, sustained competitiveadvantage.